Companies trying to manipulate market, says SEBI chief

A watch is being kept on listed companies to see if they are complying with capital market regulator Securities and Exchange Board of India (SEBI) rules or trying to manipulate the market to serve vested interests, its chief said on Friday.

“Some companies are trying to manipulate the market by avoiding paying long-term taxes,” SEBI chairman Upendra Kumar Sinha told news channel CNN-IBN on Friday, adding the watchdog did not hesitate to act against some of the largest corporates found violating rules.

“We notice even a slightest attempt to manipulate (the market). As we caught (some companies) in wrong-doings in their IPOs (initial public offerings), no manipulation is possible henceforth.”

To prevent manipulation from the beginning, SEBI introduced call option to buy shares at an agreed price on the opening day of any company’s IPO.

“As a pro-active and sensitive regulator, we act against any company if we anticipate something going wrong (with it) even before action is sought,” Sinha said.

For instance, SEBI allowed some start-ups to list their shares on the exchange for trading even before there was demand for their shares, he said.

Claiming that there was no political pressure on the regulator, the former IAS officer said the it had worked with many governments earlier and maintained its stand.

“Even the Supreme Court (on July 6) upheld our order to regulate GDR (global depository receipts) that are raised by Indian companies and listed on overseas exchanges like Germany.

Noting that it was unfair to assume its crackdown on capital markets had impacted filing of red prospectus for IPOs, Sinha said on the contrary, filing for IPOs had gone up during the last two years.

Observing that corporates would invest when the macro-economic climate was good, Sinha said traditional way of raising money to manipulate (stock) markets had gone away.

Denying that he was unfair to Indian conglomerate Sahara in dealing with its violation of rules, he clarified that even the Supreme Court had upheld his actions against the company for defaulting on paying back its investors.

“As a regulator, we deal with matters in a very dispassionate way. It is mischievous allegation that I had acted against Sahara in a partisan way,” Sinha added.

New Delhi, Dec 16, 2016: Sebi’s regulatory norms of appointing at least one woman director on the respective billboards till December 13, has not been followed by as many as 15 public sector firms including ONGC and Indian Oil Corporation. Reports of it went to the Parliament on Friday.

As per the new Sebi directives and the Company’s Act, 2013 all the listed firms were required to have at least one woman director on their boards from April 1, 2015. These rules are aimed at ensuring gender diversity in boardrooms.

As on December 13, 2016, Bharat Petroleum Corporation, GAIL, Power Finance Corporation, Rural Electrification Corporation, Chennai Petroleum Corporation, Scooters India, MMTC and Fertilisers & Chemicals Travancore have not appointed women directors on their board, Corporate Affairs Minister Arun Jaitley said in a written reply to Lok Sabha, mentioned PTI.

According to the Minister 169 and 1,106 companies listed on the NSE and BSE respectively had not appointed women directors as on September 30, this year. To avert this discrimination by acting against listed firms without a mandatory woman director, Sebi in April 2015 had announced a minimum Rs 50,000 fine. Further action against non-compliance of the directives include action against promoters and directors, if they remain non-compliant beyond six months.

A four stage penalty structure is announced by the market watchdog wherein fines would increase with the passage of time. It had asked the stock exchanges to levy the fines as the violation relates the Listing Agreement.

Mumbai: Finance Minister Arun Jaitley on Monday rang the symbolic opening bell to mark the merger of two market watchdogs, the Forward Markets Commission for commodity futures with the Securities and Exchange Board of India, at a function here. While the commodities futures regulator was set up in 1953, the stock and debt markets regulator was set up in 1988 as a non-statutory body and later became an autonomous and fully-independent institution in 1992.

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“This merger indicates how the size of our markets have grown and how India has now become more aspirational,” Jaitley said at the function at the Trident hotel in downtown Mumbai.

“It also reflects how sectoral challenges have changed.” The finance minister said India had to continue to change, evolve and reform. “Our nation is no longer satisfied with 6-8 percent band of growth,” he said, adding that this had become even more compelling since the world today was looking at India differently with much expectation.

SEBI chairman U.K. Sinha said the priority post the merger would be to develop trust in India’s commodities market. “All steps will be taken to develop the market,” he said. Jaitley had indicated an early merger of the watchdogs in his budget speech earlier this year.

“I also propose to merge the Forwards Markets Commission with SEBI to strengthen regulation of commodity forward markets and reduce wild speculations. An enabling legislation, amending the Government Securities Act and the RBI Act is proposed in the Finance Bill, 2015,” he said.

The merger on Monday was the result of the suggestions made in May 2003 by the Inter-Ministerial Task Force on Convergence of Securities and Commodity Derivatives Markets, chaired by bureaucrat Wajahat Habibullah.

“Even though there are some differences in commodity and financial derivatives markets, they have close resemblance in so far as trade practices and mechanism are concerned. Indian securities market has witnessed significant structural change since 1990’s,” the task force said.

“If derivatives in commodities resemble securities, then the developmental challenge of obtaining sound institutions for trading commodity derivatives can be eased by using the stable and mature institutions that are found in the securities markets,” it said.

“If the institutions of the securities markets are used, this would speed up the pace at which modern market institutions become available to farmers, and accelerate the growth rate of the agricultural sector.” Other benefits outlined for merger include: Economies of scale and scope, the possibility of strengthening the commodity spot market, better serving of stakeholders, strengthening the price discovery for farmers and desirable impact on the informal market.

According to the Indian securities market regulator, SEBI, the amount has to be disgorged within 45 days with an additional 12 percent simple interest calculated from January 7, 2009.

SRSR Holdings Pvt Ltd, a front for the Satyam Computers promoter group, has been ordered to repay Rs 1,258.88 crore. The remaining amount of approximately Rs 543.93 crore has to be paid by 11 others including around Rs 26.62 crore to be paid by Ramalinga Raju and Rs 29.54 crore to be paid by B Rama Raju, as per the order issued by SEBI’s whole time member Rajeev Kumar Agarwal.